Hi there,
At PERSUIT, we’re working to bring transparency to the legal buying process.
One tool in our toolkit has been a (I admit) controversial one since we launched it.
The reverse auction.
It’s controversial because there’s a misconception that reverse auctions mean pitting firms against one another solely for the purpose of extracting lower prices. That the lowest price bidder always wins.
A “race to the bottom” is what we hear. And that misses the point entirely.
This week, our Legal Advisory team released a brand new data report looking at what happens when some of the most prestigious legal teams in the world use reverse auctions.
Here’s just one insight from the report:
The lowest priced bidder in a reverse auction was selected only about half the time.
Which means that, interestingly, price is NOT always — or even most frequently — the main reason that in-house teams select a particular firm for a matter.
That might surprise you, but it doesn’t surprise me.
I know from talking to hundreds of in-house teams over the last few years that — while price is a factor — it’s far from the only factor.
What in-house attorneys really care about is finding the best firm — not necessarily the lowest priced one.
And although it seems counterintuitive, that’s exactly what reverse actions do.
Price is everything. Except when it isn’t.
What if you could finally take price out of the equation?
What if you could focus more on the things that really matter? Strategy, experience, relationship, diversity, approach?
Incidentally, ask any firm whether they would prefer to know the pricing of their competitors — or remain in the dark?
Firms want to know their competitors’ pricing 100% of the time. Who wouldn’t?
Price will always matter of course.
But reverse auctions make it matter less.
A GC I spoke to recently summed it up better than I could:
“Now I get it Jim. By putting price into the equation, PERSUIT takes price out of the equation.”
Exactly!
I hope you’ll take a moment to look over our full report:
Whether you’re a member of an in-house team…
Or you’re a partner or an associate in a firm trying to find new opportunities to win work (like I used to)...
I think you’ll find it useful.
